ECB Chief Economist Philip Lane said in a WSJ interview that inflation outlook not satisfactory and the central bank would decide on the next move on a “meeting by meeting” basis. Even if inflation does climb to 1.3% in 2022 as in ECB’s projections, it would stay well below the 2% target. There ares speculations that ECB could expand the PEPP program by year end.
“The current inflation level remains far away from our goal,” Lane said . “We don’t think that is a satisfactory inflation outlook.” “I wouldn’t focus on any one meeting… It’s not the case that we only look at the formal projection rounds.”
Lane also noted that the next phase of the economy is “going to be tougher”. “The big question, and this is why there is so much uncertainty, is: how quickly can the current dynamic, with rising cases, be stabilized.””Some of that uncertainty will be resolved this autumn,” he added. “We will know the fiscal plans, we will know more about the pandemic.”
